Labour Force data provides some much-needed good news; but hours worked is the Canary in the coal mine

Today’s ABS data on the February labour force provides some much-needed good news for the economy and suggests that, at least until the impacts of the COVID-19 outbreak hit home, the labour market was doing quite well.

Trend employment lifted 21,100 (seasonally adjusted was up 26,700) after some minor downward revisions to previous months. This takes Trend employment growth to 1.9% (unchanged from last month) and the unemployment rate down to 5.1% (both Trend and s.a.).

In Queensland too we see some healthy numbers. Trend employment lifted 6,700 (seasonally adjusted +14,300) while January’s numbers were revised up slightly. This takes Trend employment growth to 2.5% (up from 2.4% in Jan) and the unemployment rate down to 5.7% (Trend) or 5.6% (s.a), helped by a fall in participation.

However, as the ABS note in the release;

“Quality assurance of data for February did not identify any notable impact to headline statistics. It is important to note that the reference weeks for February fell in the first half of the month, at a point where there was only a relatively low number of confirmed COVID-19 cases within Australia and before it was declared a global pandemic. As with other major disruption to the economy, early impacts are usually most evident in the Monthly hours worked in all jobs series.”

This data therefore does not yet encompass anything like the true scale of the COVID-19 hit that is sure to come. In addition, the final sentence from the ABS above is important. As regular readers will know one of our favoured labour force measures is hours worked per capita of working-age population…and here we can see a marked downturn in the Feb data at both State and National levels.

In Australia this measure fell to 85.66 (after Jan was also revised down) and in QLD to 85.83 (again, Jan was revised down). These give us some early sign of the inevitable decline in the labout market we are about to witness.

Next week will see the realese by the ABS of their original regional labour force data at which time we shall be updating the Conus/CBC Staff Selection Trend Regional Employment Trend series.

 

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